The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

Hillshire Brands looks set to become the next American food icon owned by Brazilians.

Pilgrim's Pride Corp, a subsidiary of Brazilian beef behemoth JBS, offered Hillshire $5.7 billion in a $45 per share cash offer late Tuesday. The JBS growth trajectory has been nothing short of rocket propelled. It already dominates the animal protein processing business in the U.S., which means chicken, pork and beef.

A little more than 10 years ago, Wesley Mendonça Batista, was a typical Brazilian meat packing cowboy working for a company no one in the U.S. outside of the beef trade knew existed. Batista was the kind of guy who butchered his own meats, a skill he learned from his father. He also helped run a company that was -- at the time -- synonymous with deforestation and foot and mouth disease, hardly a sexy company with positive headlines in Brazil. Oh, they had their enemies. Every beef company in Europe feared them. If a Brazilian bovine sneezed, it was an immediate ban on JBS exports to the U.K. or France.

Regardless of those obstacles, JBS Friboi was one of three Brazilian meat packers that dominated the world of beef thanks to an abundance of land and miles and miles of grass. Together, the threesome made Brazil the No. 1 beef exporter. They knew that in order to keep that leadership, they had to tackle tough issues in Brazil, from animal health to cattle sourcing in the Amazon, blamed for deforestation. They had to quickly learn to run a tight margin business, in a tough Brazilian environment of high interest rates (way over 7% annually) and inflation, and global environmental NGOs watching their every move.

JBS CEO Wesley Batista. His company has his father's initials. From small beginnings in the center-west farm towns of Brazil, to multi-billion dollar acquisitions of desirable U.S. food brands. Batista sets his company's target on Hillshire Brands in latest bid.

Of the three Brazilian majors -- JBS, Marfrig and Bertin -- only two are standing. Only one is the world's largest meat processor. That's Batista, the center-west Brazilian cowpoke turned CEO. He's managed to take the company into the U.S., bought out Pilgrim's Pride and rival Bertin in September 2009, and made JBS bigger than Tyson Foods.

The Hillshire Farms deal, if approved, will make Batista's JBS the Goliath of meat.

It was a fairly humble beginning. When José Batista Sobrinho, Wesley's father, started JBS back in 1953 at his small farm in Goias state, it was just a one-man operation. He slaughtered one or two cattle a day, boned the meat and sold it to the local butcher. In 1956, when Brazil’s new capital, Brasilia, was being built 125 miles away, JBS provided meat to the city butchers and restaurants. In 1968 Sobrinho bought a small slaughterhouse, boosting the number of cattle slaughtered to 100 a day. Two years later another processing plant upped JBS's capacity to 500 a day.

Today, JBS has more than 300 production facilities worldwide -- from the U.S. to Australia -- and over 185,000 employees.

The company went public in 2007 on the Brazilian stock exchange in São Paulo. That’s when its international acquisition spree took off. Batista's first U.S. acquisition was Greeley, Colorado based Swift for around $1.5 billion that same year.

It presented JBS with the perfect opportunity, Batista told FORBES in an interview published in the magazine in 2011. Swift was the worst-performing company in the U.S. beef market while other companies were performing relatively well. For Batista, Swift’s problem was clearly a question of poor management. It paid $225 million in cash and assumed all of Swift’s debt, bringing JBS 12 plants in the U.S. and Australia and adding 23,000 head of cattle to be processed daily. Before the contract was signed, Batista, who spoke practically no English at the time, decided that to turn the company around he’d have to move his wife and three young children to Greeley and get his hands dirty. He spent the 45 days before closing the deal with a translator interviewing 300 Swift employees. He compared the experience to being a soccer team manager: “When you’re a new manager the first thing you have to do is get to know the team.”

Batista wants to get to know the Hillshire team.

The JBS CEO spends most of his time traveling– mainly throughout the U.S., Australia and Brazil. He visits the meat processing facilities there, though he spends most of his time meeting with clients, partners and investors. Ten years ago he never would have thought his family company would be in the U.S. “You reach a point and reach a certain reality, then you’re ready for another reality,” he told FORBES. “One step at a time.”